S&P 500 - May 11, 2009

some charts courtesy of stockcharts.com

Yo-Yo market continues.

S&P closed down on below average volume. Some capital went back into Nasdaq, which rose on below average volume.

Breadth for the day was negative.


Index spent most of the day around the 912 pivot and closed just below it. Despite the 20-point drop, there was no change in short term trend, and index is still above the Thursday low of 907

There are some signs of short term technical weakness but price is still in the upper half of the road map channel

This is the 60-minute chart of June contract

Price has moved below a short term trend line, but is still above other trend lines that may support it in hours and days ahead.

Let’s zoom in a little

We need more selling and at higher volume to solidify the top.

My mental stop (917+) that I discussed in the morning was not hit on this 5-minute chart

But I took some profit.

I still plan to stop the remainder of initial short position if Thursday’s high is bettered.

In the morning post, I had a chart of Nas100 June contract that showed a clear trend break. Today, some money sloshed away from S&P and into Nas100, but not enough to recover the tech index from the trend line break

See how the theme changes from one day to another?

This is a daily chart of Nas100 index

Just does not look very hot right now. There is a support shelf around 38% retracement (1280) but, before that, short term MAs may also offer enough support to the index

To wrap up:

It was a low volume affair for the markets today.

Index is around 912 pivot which bears need to break and bulls need to hold and improve.

There are some signs of weakness but bears need further selling on better volume.

There are some early signs of volatility as money is herded back and forth from Nasdaq to S&P.

Nas100’s uptrend from March lows appears broken. It does not necessarily mean a collapse as it may enter a sideways consolidation. It, however, means that risk capital has become hesitant.

A Tuesday break of Thursday’s low (900) to the downside may indicate the rally, or one leg of it, is over, pending confirmation from a change in short term trend

Short term trend is up. Mid-term trend is up. Long term trend is down.

Resistance is 912 (pivot), 920, and 935 (Jan 2009 top). Support is 885 neckline

This is an option expiration week, all sorts of games will be played by all sorts of market characters

I leave you with this daily chart

This is not a broken index yet. It just looks toppy. If I wanted to short it here, I would be very disciplined with my stops. I do not wish to establish any new long positions here. I do not want to have many long positions without hedges or insurance.

Have a nice evening!